SAN FRANCISCO, USA: Google Inc has settled a lawsuit alleging privacy violations in connection with its Buzz social networking service, according to a court document filed on Friday.

The settlement filing comes on the same day Google announced changes to its privacy policies to make them "more transparent and understandable," Associate General Counsel Mike Yang said on the company website.

Launched in February, Buzz initially used an individual's email contacts from Google Gmail to build a social network of Buzz contacts that the rest of the world could see. Google acted quickly to change the settings so that contacts were kept private by default.

To settle the proposed class action brought by a Gmail user, Google will set aside $8.5 million for attorneys fees and donations to organizations focused on Internet privacy, the court filing said. In addition, "the settlement requires that Google undertake wider public education about the privacy aspects of Buzz," the document said.

A Google spokesman and an attorney for the plaintiffs were not immediately available for comment.

The case in San Francisco federal court is In Re Google Buzz User Privacy Litigation, 10-cv-00672.

Meanwhile,  Google said it was the target of an investigation by the Texas Attorney General's office into the fairness of its search engine rankings.